Sam Rae (Hawke, Australian Labor Party) | Hansard source

It's always a great pleasure to follow a characteristically flaccid contribution by the member for Bradfield, the previous speaker, and perhaps seek to reintroduce a little intellectual honesty to the debate. We on the Labor side know that Australians are doing it tough. Global inflation and supply chain pressures have squeezed household budgets as the cost of living increases—and people are feeling the pinch. While inflation is moderating and our targeted assistance packages are providing important relief, we know that Australians still need support. That's why the Albanese Labor government has introduced these tax cuts—to provide cost-of-living support to Australian households doing it tough. It's about providing relief through reforming and reshaping our income tax system to ensure Australians keep more of what they earn.

The Treasury Laws Amendment (Cost of Living Tax Cuts) Bill 2024 and the Treasury Laws Amendment (Cost of Living—Medicare Levy) Bill 2024 will deliver a fairer tax system, return bracket creep to taxpayers and drive labour supply in our economy. It's not only an important measure to address the cost-of-living challenge; it's an enduring reform that rewards the hardworking Australians at the heart of our economy. Nurses, teachers, truckies and retail workers will all get a bigger tax cut. In fact, 84 per cent of all Australian taxpayers will receive a larger tax cut under Labor's plan. That's because we're improving our income tax system right up and down the income scale.

From 1 July this year we're cutting the 19 per cent tax rate to 16 per cent, we're cutting the 32.5 per cent tax rate to 30 per cent, we're increasing the 37 per cent tax threshold from $120,000 a year to $135,000 a year, and we're increasing the top tax threshold from $180,000 a year to $190,000 a year—the first time this has been increased since Labor was last in office. This holistic reform will deliver more support to the working Australians who need it most.

In my electorate of Hawke, the average taxpayer will receive a tax cut of $1,428—that's $800 more than under the former Morrison plan. Every single one of the 73,000 taxpayers in my electorate of Hawke will receive a tax cut, and 89 per cent of people in my community will be better off under Labor's plan. These are local tradies, nurses, police officers and early childhood educators who will be taking home more pay every week, providing valuable relief to their household budgets. For example, a household in Melton in my electorate with a teacher on 85 grand and a part-time factory worker on 40 grand will save a total of $2,458—almost $1,500 more than under the Liberals' old Morrison plan. There are tens of thousands of households like this across my electorate and millions right across the country that will see similar savings.

Given that these changes will see every Australian taxpayer keep more of the money they earn, it should come as no surprise that Labor's tax cuts are also better for the economy. When we invest in our workforce, reward working people and properly incentivise participation, we grow the economic pie for all. Good economic management is all about building an economy that works for the people, not the other way round. That's why since Labor came to office we've increased funding to aged care and rolled out cheaper child care. That's why we've improved the pay and conditions of workers with our secure jobs, better pay bill and our closing loopholes reforms. That's why we've seen record increases to minimum and award wages, two consecutive quarters of real wage growth and the strongest wage growth for 15 years. And it's why we're delivering these tax cuts.

This is what the Albanese Labor government is all about. We're delivering higher wages and lower taxes so that Australians can earn more, keep more of what they earn and make the economy stronger for all. Treasury estimates that Labor's tax cuts will increase labour supply by nearly a million hours a week—more than double the impact of the Liberals' original plan. This is because Australians will be better incentivised to work more under Labor's tax cut plan, particularly in some of our most in demand professions, such as those in the care economy. Thanks to Labor's tax cuts, 97 per cent of registered nurses will be better off, 97 per cent of carers will be better off and 97 per cent of childcare workers will be better off. By incentivising taxpayers to work, Labor's tax cuts will boost labour supply across these professions right across our country and our economy.

Clearly, Labor's tax cuts aren't just about making our income tax system fairer; they're about responding to the current economic conditions that we face. It is important to remember that, since the former Liberal government legislated their plan five years ago, we've had a once-in-100-year pandemic, persistent global inflation and multiple foreign conflicts that have all contributed significantly to the rising cost of living for Australian households.

Unfortunately, while these rising costs have been felt by all Australians, they have disproportionately impacted low- and middle-income earners. The Treasury advice on Labor's tax cuts showed that people in the lowest income quintile were spending more than their disposable income as quarterly inflation peaked under the Liberals opposite. The advice also showed that working Australians were experiencing the highest increase in the cost of living, with those in the bottom three income quintiles far more likely to be experiencing financial stress. That's why Labor's tax cuts are necessary: to put more money in the pockets of every Australian taxpayer, especially those who need it most. Importantly, the Treasury also confirms that we can do this without adding to inflation, because Labor's tax cuts plan is a broadly revenue-neutral approach.

We know that those opposite will vote in favour of this bill despite the way they carry on. The Leader of the Opposition has publicly declared this. They might stand up at the dispatch box and flail around, but ultimately they will walk into this House and vote in favour of this tax plan. They refuse to admit that this government has made the right call by delivering larger tax cuts to more Australians. They just can't bring themselves to say it. Perhaps it's because they spent nearly a decade failing to live up to their own false sense of economic superiority. They failed to deliver a single surplus, they suppressed wages, they oversaw the worst decade for productivity in our country in 50 years and they racked up $1 trillion of Liberal debt. Meanwhile, in under two years, the Albanese Labor government has delivered the first surplus in 15 years. We've delivered tens of billions of dollars in cost-of-living relief through child care, energy bills, rents medicine and more; we're getting wages moving again, with wages growing at four per cent, the highest rate in 15 years; and we've had two consecutive quarters of real wage growth. And now we're delivering meaningful income tax reform, leaving more money in the pockets of every Australian taxpayer.

Given the Liberals' decade of failure, it is hardly surprising that they can't quite wrap their heads around another example of responsible economic management from the Albanese Labor government. It is almost as if they can't believe it's possible. They don't know what to do. When asked if the opposition would roll back Labor's tax cuts, the Deputy Leader of the Opposition jumped up and said: 'This is our position. This is absolutely our position.' While the Leader of the Opposition has since said that the Liberals will support Labor's tax cuts, it is clear from the Deputy Leader of the Opposition's statement and the blithering contributions from those opposite in this debate that they are being dragged kicking and screaming to it. It's clear that they're more interested in the politics than they are in the policy of cutting taxes for working people.

The case for Labor's tax cuts is absolutely crystal clear. It's good social policy, it's good fiscal policy and it's good economic policy. It will boost labour supply, return bracket creep to those it hits hardest and, most importantly, ensure that 13.6 million Australian taxpayers will get a tax cut on 1 July. I am very proud to be part of a Labor government that is delivering the support that the households in my community desperately need. Thanks to Labor's tax cuts, families right across Hawke, from Sunbury to Melton and from Bacchus Marsh to Ballan, will be able to earn more and keep of what they earn, and we'll keep looking out for them as they face the cost-of-living pressures that they are currently facing.

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